New labelling system LESS aims to create transparency for green steel

The German Steel Federation and the Federal Ministry for Economic Affairs and Climate Protection (BMWK) today jointly laid the foundation for the development of green lead markets for climate-friendly steel with the introduction of the Low Emission Steel Standard (LESS). LESS was created on the initiative of the German Steel Federation and its member companies and is supported by the BMWK. This labelling for low-CO2 steel is based on the results of the broad stakeholder process "Lead markets for climate-friendly raw materials" carried out by the BMWK.

Bernhard Osburg, President of the German Steel Federation, emphasises the importance of clear rules, definitions and verifiable standards for the success of the transformation of the steel industry: "As a steel industry, we want to develop a market for climate-friendly steel in order to replace public start-up financing for our transformation as quickly as possible. To achieve this, we need to make the progress made in decarbonising our sites visible, comparable and therefore also assessable.

The question of a definition of green steel has long been the subject of intense global debate. I am delighted that, by joining forces, we have succeeded in developing a widely agreed solution based on international rules and standards, which we are now putting into practice. This will provide steel users with all the information they need to document their CO2 reduction targets using "green" - i.e. low-CO2 - steel.

Federal Minister for Economic Affairs and Climate Protection Robert Habeck: "The new LESS labelling is an important and welcome initiative by the German steel industry for sustainable standards and greater comparability in transformation efforts. Sustainable labelling is a key factor in creating transparency and incentives for climate-friendly raw materials and products on the market. The labelling takes up the results of a broad BMWK stakeholder process with industry, science and politics on definitions for climate-friendly raw materials, including steel, and is thus also broadly supported by the industry."

LESS is the first standard in one of the world's largest steel-producing countries to combine both routes of steel production: both the conventional blast furnace route in the transition to low-CO2 hydrogen-based production processes and the already low-CO2 scrap-based electric steel production. The companies on both routes are endeavouring to take further steps towards decarbonisation. LESS makes it possible to compare the decarbonisation efforts of both routes. The aim of LESS is to accelerate this transformation to climate neutrality using market-based means.

LESS is therefore significantly more ambitious than comparable labelling schemes. LESS makes both the current status of the transformation and the transformative efforts undertaken on the path to the production of "near-zero" steel visible across all process routes and thus marketable. Those who boldly lead the way with investments in climate-neutral steel can thus be rewarded on the market.

The centrepiece is the labelling system, which uses a graduated classification scale to classify low-CO2 steel. At the same time, companies that are certified in accordance with LESS must disclose their scrap rate as well as the Product Carbon Footprint (PCF) or Global Warming Potential (GWP) total contained in the finished steel product in accordance with the Environmental Product Declaration (EPD). This provides steel users with all the information they need to document their climate targets using steel produced with low CO2 emissions. The LESS rulebook forms the basis for independent certification.

The introduction of LESS was preceded by a one-year stakeholder process entitled "Lead markets for climate-friendly raw materials", which was organised by the BMWK and concluded in November 2023. More than 60 representatives from political institutions, manufacturing companies, steel traders, the processing and customer sector as well as members of NGOs, institutes and think tanks were involved. With the launch of LESS, the steel industry in Germany is implementing the results of this stakeholder dialogue for the steel industry.

LESS is designed for international cooperation. On the one hand, the system is based on the internationally recognised proposal of the International Energy Agency (IEA), which was recognised by the G7 countries in May 2022 as a robust starting point. Secondly, LESS will be managed by a Brussels-based AISBL of the same name (similar to the e.V. in Germany), which is already in the process of being founded, as the system owner from autumn 2024. LESS is open to all steel producers as a voluntary labelling scheme.

Source and Photo: WV Stahl